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Bitcoin Depot Files for Chapter 11 Bankruptcy and Takes Its Entire ATM Network Offline
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Bitcoin Depot, once the largest Bitcoin ATM operator in the United States, filed for Chapter 11 bankruptcy protection on Monday in the US Bankruptcy Court for the Southern District of Texas and immediately pulled its entire kiosk network offline. Canadian entities will join the US proceedings while other foreign operations wind down under applicable local law. CEO Alex Holmes pointed directly to a regulatory environment that has become increasingly hostile to Bitcoin ATM operators, citing state-level transaction caps, tighter compliance requirements, and outright bans in multiple jurisdictions as the primary forces that made the company's business model unsustainable. Indiana became the first state to ban Bitcoin kiosks in March, followed by Tennessee and Minnesota, while Connecticut suspended Bitcoin Depot's operating license the same month.
The company also faced legal pressure from multiple state attorneys general. Massachusetts and Iowa both filed lawsuits against Bitcoin Depot, alleging the company enabled fraud that cost residents tens of millions of dollars. The FBI logged 13,460 crypto kiosk fraud complaints in 2025 with reported losses of $389 million, a 58% jump from the prior year, giving regulators and prosecutors a compelling statistical case for aggressive enforcement. Bitcoin Depot had already disclosed it could not submit its quarterly 10-Q report on time before the bankruptcy filing, and Q1 2026 results painted a stark picture of how quickly the business deteriorated. Revenue fell 49.2% year over year to $80.7 million, gross profit collapsed 85.5% to just $4.5 million from $31.2 million a year earlier, and cash reserves dropped from $65.6 million in December to $44 million by March while the company accrued over $20 million in legal judgments during Q4 2025.
